Crude prices in Asia held onto gains on Tuesday late into the session, but sentiment remained cautious ahead of weekly industry estimates of U.S. oil and refined product stockpiles.
On the New York Mercantile Exchange crude futures for June delivery rose 0.09% to $46.475 a barrel, while on London’s Intercontinental Exchange, Brent gained 0.12% to $49.40 a barrel.
The American Petroleum Institute (API) reports its estimates of crude and refined product stocks at the end of last week after the market close on Tuesday. The figures are followed on Wednesday by official data from the U.S. energy Information Administration.
Analysts expected crude supplies fell by 1.8 million barrels, with gaoline stocks expected to drop by 875,000 barrels and distillate inventories down by 950,000 barrels.
Overnight, crude futures settled higher on Monday, after Russia and Saudi Arabia supported the idea of extending the supply-cut agreement into 2018 to drain the glut in supply.
Oil prices bounced off lows, as oil ministers from both Russia and Saudi Arabia said they would consider extending production cuts into 2018.
Russian energy Minister Alexander Novak said on Monday, that a production cut extension for a longer period will help “speed up” market rebalancing. Novak’s comments on a possible deal extension for longer than the widely anticipated six-month period were echoed by Saudi oil chief Khalid Al-Falih, who said that he was “confident the agreement will be extended into the second half of year and possibly beyond.”
OPEC is expected to decide at talks on May 25 whether to extend the current deal to cut production for an additional six-months to the end of the year.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd).
The positive start to the week for oil futures, came on the heels of a 6% loss sustained in the previous week, after concerns over rising U.S. oil output cast a doubt on OPEC’s efforts to rein in supply in the industry.
Oilfield services firm Baker Hughes reported Friday, its weekly U.S. rig count rose by 6 to 703. It was the sixteenth straight weekly increase amid expectations that U.S. shale output was set for its biggest increase this month.
